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Introduction to Economic Policy

Module Code: EC1040

Module Name: Introduction to Economic Policy

• ECTS Weighting: 10
• Semester/Term Taught: Michaelmas + Hilary Term
• Contact Hours: 44 hours of lectures and 20 hours of tutorials
• Module Personnel: Lecturer - Professor Gaia Narciso (MT) / Professor Michael King (HT)

Module Learning Aims

The first part of this module aims to provide students with a comprehensive outline of some of the core elements of micro economics and their applications. By the end of the first half of the module it is hoped that students will be able to use their knowledge of economic theory and policy so as to have a better understanding of the drivers of demand and supply and of the decision making processes of individuals and businesses. Students should also have an understanding of market failures and how governments can sometimes improve market outcomes.

The second part of this module aims to provide students with a comprehensive outline of some of the core elements of macroeconomics and their applications. By the end of the second half of the module it is hoped that students will be able to use their knowledge of economic theory and policy so as to have a better understanding of how an economy functions.

Module Content

Michaelmas Term:

A. Introduction to economics: how markets work

1. Introduction to the subject of economics
2. Demand, supply and equilibrium
3. Elasticity, price floors and price ceilings

B. Market failure

1. Externalities
2. Public goods
3. Information asymmetry

C. Income inequality and poverty

1. Poverty and income distribution
2. Global development and inequality

D. Market structures

1. Perfect competition
2. Monopoly
3. Oligopoly & Monopolistic competition

Hilary Term

A. Macroeconomics: looking at the economy as a whole

1. Introduction to Macroeconomics
2. Circular flow of income
3. National accounts: GNP and GDP

B. Economic growth

1. Global poverty challenge
2. When, where and why did economic growth start
3. Theories of economic growth

C. Business Cycles

1. Business Cycles, Potential Output and AS-AD Model
2. Money and Banking
3. Fiscal policy

D. Economic Policy Areas

1. Competitiveness
2. Labour Markets and Unemployment
3. Migration
4. Housing

Learning Outcomes

On successful completion of the two modules in this course, you will be able to:

• Explain in detail the concepts of demand, supply, prices and equilibrium and illustrate shifts and movements in demand and supply curves
• Discuss the concepts of price floors, price ceilings and elasticity
• Explain the causes of market failure and understand the role for government
• Understand how income inequality and poverty are defined, measured and addressed in an economic context
• Evaluate market structures including monopoly, oligopoly and monopolistic competition Outline the role of competition policy and regulation
• Understand the basic structure of the economy
• Explain fiscal policy
• Explain monetary policy
• Understand employment and unemployment
• Discuss economic growth

Recommended Reading List

Given the different backgrounds of students in the class it is difficult to recommend one textbook.

The core textbook, particularly for those starting out in Economics for the first time, is Gregory Mankiw and Mark P. Taylor's Economics, 3rd edition (South-western: Cengage learning).

Aside from this, those wishing to learn about the background to economic theories can read Paul Strathern's A Brief History of Economic Genius (Texere, London and New York, 2001), Todd G. Buchholz's New Ideas from Dead Economists (Penguin 1989; re-print 1999) and Robert Heilbroner's The Worldly Philosophers (1953; re-print Simon and Schuster, 1991).

Assessment Details

The final exam amounts to 70% of the marks for this module. In the first semester there is a group work project accounting for 15% and in the second semester there is a multiple choice test worth 15%.

Module Website

Michaelmas Term: Blackboard

Hilary Term: Blackboard